Now that the effects of climate change have become more pressing, many individuals and organisations are rethinking how their financial choices can contribute to environmental progress. In Singapore, where sustainability is a growing national priority, more people are seeking ways to align their savings and investments with environmental values without compromising their financial goals.
This is where green and sustainable deposits come into play. These are time deposits placed with financial institutions that are specifically earmarked to fund environmentally sustainable projects. Unlike traditional deposits, which can be used for a wide range of lending purposes, green deposits are specifically committed to supporting environmentally friendly initiatives.
While some may assume that supporting sustainability comes at the cost of returns, green deposits challenge that perception. In reality, they offer a compelling solution that balances purpose with performance. This article explores how green deposits contribute to climate positivity while maintaining competitive returns.
1) Green Deposits Fund Profitable Climate-Positive Projects
At the core of green deposits is their role in directing funds toward projects that are both environmentally beneficial and commercially viable. When you place money in a green deposit account, banks channel those funds into initiatives like renewable energy developments, energy-efficient infrastructure, sustainable water management, and green transport solutions. These sectors represent areas of rapid growth, backed by long-term policy commitments and increasing global demand.
Investing in solar farms or wind energy projects, for example, reduces reliance on fossil fuels while producing stable revenue through energy generation contracts. Similarly, funding building retrofits to improve energy efficiency will cut down carbon emissions and result in operational savings. These types of projects often benefit from government subsidies, tax incentives, or long-term off-take agreements, which contribute to their financial resilience. In this way, green deposits allow depositors to support initiatives that help mitigate climate change while enjoying dependable interest earnings.
2) Sustainable Innovation Backed by Green Funding Can Yield Strong Returns
Beyond traditional green infrastructure, green deposits also enable financing for innovative solutions that are paving the way for a more sustainable economy. Companies receiving such funding often use it to transition towards cleaner processes, develop eco-friendly products, or implement technologies that reduce waste and emissions. These investments can unlock new markets and lead to meaningful cost reductions.
Take, for example, a manufacturing firm that secures green financing to adopt circular production methods where they recycle materials back into the supply chain rather than disposing of them. This approach reduces environmental impact and shields the business from rising raw material costs and supply disruptions. Another example is when a food and beverage company shifts to sustainable packaging. The company can tap into a growing segment of eco-conscious consumers, setting itself apart from competitors.
These innovations, once considered niche, are now central to many companies’ long-term strategies and can result in stronger revenue growth and operational efficiency. Thus, funding innovation through green deposits becomes a powerful way to generate both climate value and commercial advantage.
3) Green Deposits Offer Competitive, Stable Returns for Depositors
A common concern among potential depositors is whether choosing a sustainable product means accepting lower returns. Fortunately, green deposits are structured in a way that offers returns comparable to conventional fixed deposits, with minimal deviation in risk profile. From the depositor’s point of view, the process is often the same: funds are locked in for a defined term and earn a fixed interest rate, just as they would with a traditional product.
The key distinction lies in where the funds go. Rather than being used to fund general lending activities, the capital from green deposits is earmarked for verified, sustainability-aligned projects.
4) Carbon Footprint Reduction Strengthens Long-Term Business Viability
The impact of green deposits also enables companies to make meaningful, measurable changes that reduce their carbon footprints, leading to greater operational and strategic advantages. Businesses that invest in energy efficiency, renewable power, or low-emissions technology often see lower operating costs over time, which improves profitability. For example, switching to solar energy or optimising supply chains for efficiency can significantly reduce utility bills and transport expenses.
Moreover, in today’s regulatory environment—especially with Singapore’s increasing commitment to sustainability under its Green Plan 2030—being proactive about emissions reduction is also a form of risk mitigation. Companies that lag behind in carbon performance may face compliance challenges, carbon taxes, or reputational damage. By contrast, those that take early action stand to benefit from incentives, better stakeholder relationships, and eligibility for future green procurement programmes.
5) Strong ESG Performance Drives Market Value and Customer Trust
Investing in sustainability enhances a company’s Environmental, Social, and Governance (ESG) performance, which is something increasingly valued by investors, clients, and consumers. Green deposits enable companies to fund ESG-aligned initiatives, helping them achieve higher ratings and meet procurement standards from larger corporations and government agencies.
In Singapore, there is strong national support for the United Nations’ 2030 Agenda for Sustainable Development, which guides the country’s green finance strategies and regulatory efforts. Businesses that align with this agenda are better positioned to secure long-term investor interest, unlock sustainable financing opportunities, and meet evolving expectations from stakeholders.
Moreover, brands that visibly support sustainability goals tend to command greater customer trust and loyalty. Companies that show leadership in climate and social responsibility stand out as future-ready, trustworthy, and purpose-driven.
Takeaway
The evolving landscape of finance is making space for decisions that support both environmental responsibility and financial resilience. Green deposits reflect this shift, offering a way to contribute to meaningful climate action while remaining aligned with sound investment principles.
In Singapore’s push towards a low-carbon, sustainable economy, financial choices that prioritise long-term impact are becoming increasingly relevant. Indeed, green deposits signal a growing awareness that sustainability and profitability are not opposing goals, but complementary ones.
